Span­ish banks no longer need $38bn emer­gency fund

The Pak Banker - - Front Page -

MADRID

Spain no longer needs the 30 bil­lion eu­ros ($38 bil­lion) set aside for emer­gen­cies in the first months af­ter its bank bailout was ap­proved as it is now on track for sched­uled pay­ments, Euro­pean Sta­bil­ity Mech­a­nism head Klaus Regling said on Tues­day.

Spain no longer needs the 30 bil­lion eu­ros ($38 bil­lion) set aside for emer­gen­cies in the first months af­ter its bank bailout was ap­proved as it is now on track for sched­uled pay­ments, Euro­pean Sta­bil­ity Mech­a­nism head Klaus Regling said.

The ESM will take over the 30 bil­lion eu­ros in bonds that were cre­ated in July at the fire­wall fund’s pre­de­ces­sor, the Euro­pean Fi­nan­cial Sta­bil­ity Fa­cil­ity, and never tapped by Spain, Regling told re­porters. Go­ing for­ward, Spain is on track to re­ceive dis­burse­ments from its 100 bil­lion-euro bailout in the course of its agreed res­cue pack­age, he said.

Spain is no longer con­sid­ered to be at risk of need­ing of emer­gency fund­ing, he said in an in­ter­view af­ter a joint press con­fer­ence with Lux­em­bourg’s Jean-Claude Juncker and EU Eco­nomic and Mone­tary Af­fairs Com­mis­sioner Olli Rehn. The money that had been set aside for emer­gen­cies im­me­di­ately af­ter the bailout pack­age was ap­proved won’t dis­ap­pear, Regling said. In­stead, it will now be folded into the aid pack­age as it pro­ceeds.

The group of euro-area fi­nance chiefs to­day wel­comed Spain’s bank­ing-sec­tor progress and Juncker, who heads the group of min­is­ters, said a fi­nal re­port on Span­ish banks is due by the end of this month. Regling told re­porters the ESM, which be­gan op­er­a­tions last month, should be ready to make the first dis­burse­ment from Spain’s pro­gram in early De­cem­ber. Spain also is in the process of show­ing the EU its planned fis­cal con­sol­i­da­tion mea­sures for the next two years and is work­ing hard to meet its tar­gets, Rehn said to re­porters af­ter the press con­fer­ence. Rehn said the com­mis­sion will shortly present its pro­pos­als for Spain to EU nations.

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